AT&T SportsNet RSNs reportedly short three MLB teams on rights payments

For all the talk about the bankruptcy of Diamond Sports, another worrying development about a different set of RSNs emerged this week.

Per an article from Sportico, Warner Bros. Discovery shorted three MLB teams airing on the company’s AT&T SportsNet RSNs their rights payments. Those three teams are the Astros (AT&T SportsNet Southwest), Pirates (AT&T SportsNet Pittsburgh), and Rockies (AT&T SportsNet Rocky Mountain).

And while the exact amount the teams were shorted was not publicly revealed, it wasn’t an insignificant amount.

An executive with direct knowledge of the RSNs’ financial dealings confirmed to Sportico that the AT&T outlets in Denver, Houston and Pittsburgh submitted their most recent rights payments to their MLB clubs in a timely fashion, although the disbursements were not commensurate with the contracted rates. The teams impacted by the shortfall are the Colorado Rockies, Houston Astros and Pittsburgh Pirates.

The precise amount of the funds withheld is not known but is said to be significant enough to have catalyzed concerns about the long-term viability of the three networks. According to one insider, the partial payments may be interpreted as a signal that new-ish owners Warner Bros. Discovery are eager to get out of the RSN business.

The Seattle Mariners, whose games air on Root Sports Northwest, were not shorted a payment, as the Mariners own 60% of the RSN compared to 40% for WBD.

However, the Pittsburgh Post-Gazette cited a source claiming no payments were missed or short because no payments are due until the season begins.

Another source with direct knowledge of the situation has since reached out to the Post-Gazette to dispute Sportico’s reporting, saying that payments are not due until the start of the MLB season. For that reason, no payment or part of a payment to the teams in question has been missed.

Sportico reported that WBD execs “were unaware of the issue.”

Prior to the pandemic, AT&T was looking to sell off the RSNs, but opted to keep them after receiving offers of no more than $500 million for the lot. A lot has changed since then, most notably the merger between WarnerMedia and Discovery.

Despite the conflicting reports about the payments, I feel like Warner Bros. Discovery will look to move on from these RSNs sooner rather than later. The networks never seemed like a good fit at AT&T, and they also don’t feel like a good fit at WBD. With the company continually wanting to cut costs, selling the RSNs and washing their hands of local sports seems like a logical decision.

[Sportico]